Kinds of Coverage Provided by Car Insurance

Anyone who owns a car and drives it is required by law to have insurance coverage on that car. The most recommended coverage of this type in the United States is auto insurance. However, before you decide which the best type of auto insurance for your personal situation is, you should have a full understanding of what's included in your coverage.

Car insurance coverage comes in the form of Comprehensive, Liability, and Liaison. Each form is a separate portion of the total premium charged.

Forty percent or more of the total premium comes from the Comprehensive and Collision coverage. Other options you can have added to the policy include medical coverage for you and your passengers, and a clause that protects you from uninsured motorists. This one comes in handy if you're involved in an accident with someone who has no insurance.

Comprehensive insurance is what covers any repairs or replacements needed in the event of theft, natural disaster, or fire. With the theft of a car, there will be many factors considered. These include the kind of location where the car was stolen, the time it happened, and other circumstances surrounding the event.

Liability insurance coverage is what protects the policy holder when that person is at fault in an accident. This not only provides money to pay for repairs to the car, but will also cover any medical expenses, if needed. Any wage losses that occur due to the injury as well as pain and suffering are also taken care of.

Collision is coverage that goes into effect no matter who's at fault. This coverage is in place to make sure your car is still at market value following an accident caused by colliding or being hit by another vehicle.

Car insurance agents recommend that you can cut your premium by increasing your deductibles on both the Collision and Comprehensive. If your car is over five years old, insurance agents suggest that it's wise to remove this coverage since the car is no longer worth that much. It's considered a waste of money to continue paying a premium on a car with a retail value of less than 10 percent of the Collision and Comprehensive premiums.